Morningstar - Q3 2021 - 21

Mexico
United States 63 22
Canada
Dispatches
63 20
Belgium
Sweden
Finland
45 32
Global Briefs
2021 Revenue
Absolute
TRENDS
Globalization on the Decline? Not in Investor Portfolios
87 5
Most Domestic
79-99
64-78
48-63
31-47
1-30
Most Global
Relative to 2019
Less Domestic
More Domestic
Same
Peru
The COVID-19 pandemic will reverse globalization.
For some it's a prediction, for others an
aspiration. The virus' rapid spread across the globe
highlighted the fragilities of an interconnected
world. Turning inward, increasing self-sufficiency,
and decreasing dependence on global linkages
are plausible responses.
Brazil
68 16
Colombia 67 18
Chile
56 26
Morningstar Indexes 2020 Revenue Map
% Revenue Earned Domestically
Mexico
63
United States 63
Canada
45
South Africa 47 30
U.K.
France
Ireland
35 36
27 41
18 45
10 47
Egypt
Switzerland 9 48
But business does not appear to have become
less global upon examination of the revenue mix
of publicly traded companies. The world
map below displays the share of revenue earned
domestically for 49 markets across the globe,
represented by Morningstar country indexes.
Estimates based on annual report data
Kuwait
99 1
U.A. Emirates 83 7
Qatar
81 8
Saudi Arabia 79 9
Israel
58 23
58 24*
Australia 55 27
28 40
23 43
20 44
Denmark 19 46
Netherlands 9 49
Greece
Italy
74 13
47 31
Portugal 35 35
Spain
Czech Republic 75 11
Poland
Austria
Hungary
Germany
Russia 70 14
68 17
33 37
32 38
24 42
Pakistan 97 2
India 69 15
Indonesia 91 3
China
Malaysia
Japan
91 4
Philippines 83 6
Thailand
79 9
63 21
57 25
Singapore 50 28
South Korea 48 29
Hong Kong 42 33
Taiwan
31 39
New Zealand 64 19
Turkey
76 12
from 2020 show only 13 countries becoming more
domestically focused. Meanwhile, 29 markets
became more globalized, with the share of
revenue sourced outside the country increasing
between 2019 and 2020. Nearly all Asian markets
turned outward in 2020.
Dan Lefkovitz is a strategist at Morningstar Indexes.
Norway
Belgium
Sweden
Finland
Denmark
40
28
23
20
19
Turkey
Austria
Netherlands 9
2020 Revenue
Relative to 2019
Less Global
More Global
Same
Least Global
79-99
64-78
48-63
31-47
1-30
Most Global
Peru
Brazil
87
68
Colombia 67
Chile
56
South Africa 47
Greece
Italy
Portugal
Spain
U.K.
France
Ireland
74
47
35
35
27
18
10
Switzerland 9
Hungary
Germany
76
Czech Republic 75
Poland
68
33
32
24
Pakistan 97
India 69
Egypt
99
U.A. Emirates 83
Qatar
81
Saudi Arabia 79
Israel
Kuwait*
58
58
Australia 55
New Zealand 64
Source: Morningstar. Index-level data is as of 04/30/2021, based on the most recent corporate filings, typically 2020 annual reports. Company-level revenue data represents 99.4% of global market capitalization across developed and
emerging markets. Data has been collected for 7,311 of the 7,391 constituents of the Morningstar Global Markets Index, of which the individual country indexes are carve-outs.
* No previous data for comparison.
Indonesia
China
Malaysia
Japan
Singapore
91
91
Philippines 83
Thailand
79
63
57
50
South Korea 48
Hong Kong 42
Taiwan
31
Russia 70
Are Equity Managers
Ready for Inflation?
AMERICAS
United States
Inflation fears are increasing, even among
managers who invest in stocks, which
have historically been a good long-term bet to
rise faster than the cost of living. While some
active equity managers Morningstar analysts
interviewed remain sanguine, others are reducing
cash stakes, adjusting their present value
assumptions for future earnings, and prioritizing
businesses with pricing power.
There are reasons to watch inflation closely. The
government has passed three coronavirus
stimulus packages totaling more than $6 trillion,
and there is talk of a fourth. Commodities,
including timber, copper, and corn, are much
more expensive, and in April the Consumer
Price Index increased by 4.2% over the prior year,
its biggest one-year jump in more than
a decade.
morningstar.com/lp/magazine
21

https://www.morningstar.com/articles/1042885/globalization-declining-not-in-investor-portfolios https://www.morningstar.com/authors/601/dan-lefkovitz http://www.morningstar.com/lp/magazine

Morningstar - Q3 2021

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